How do you fund a startup when VCs aren't an option?

allergies suck for nearly onethird of Americans talk about a total addressable Market well that's the problem aash Shaw committed to solving after getting accepted into y combinator the world's most prestigious startup accelerator AOS tells me how easy it was to get accepted into YC but how was very different from his expectations he mens how they got access to the right people to scale and how after YC they prioritized a sustainable business model to reduce their need of out side funds because the market had dramatically shifted from when they got accepted to when they started growing the business this is episode 51 of fundraising deistic the show where I interview Founders and investors that are actively raising or deploying capital in today's market I'm your host Jason Kirby and I've built and sold multiple companies as a Founder operator and investor across multiple Industries this show is meant to uncover what's actually happening in today's private Capital markets at help Founders and investors make better Capital strategy decisions this show is published weekly and to get notified of new episodes and access a few freebies like our guide on how to negotiate term sheets or a free list of hyper relevant investors be sure to subscribe at join. thunder. BC again that's join. thunder. BC now on to the sh hey everyone welcome back to fundraising mystified today we have AAS Shaw with us co-founder uh and CEO of winley welcome to the show thanks so much for having me Jason I really appreciate the opportunity no I'm excited to to have you on the show you're you're solving a big problem that affects you know probably billions of people when it comes to to allergies so tell the audience a little bit about you and what you're building at windley absolutely so I run windley and what we do at windley is we're fixing allergies for ever right so if you we're starting with what you breathe with so if you go out in the spring and you're just like being bombarded by pollen or dust or whatever and you're just like this is horrible well we can take care of you forever we can make it so you never have to take an antihistamine or a drug like that ever again and I actually this is a very personal problem for me because I was a horrible allergy sufferer literally from the moment I moved away from my high school uh to go off to college and then off to my first job a few years after that I just couldn't breathe um and I thought you know that's just normal uh and when I act look when you're a young 20-some year old boy it's not really important to like fix your health issues um I'm paying for it now now that I'm a few years older though yeah uh what I really learned though is eventually I tried to find the medical professional who would be able to help me which is an allergist here in the US and it was a gauntlet and a Byzantine Labyrinth just to get there and then when I get there they say okay I need you to come in for a shot in the arm for years every single week um and who has like I don't even I can't do a multi-year relationship with my physician I hardly had a multi-year relationship with a woman who became my wife when I was starting um so uh yeah I found an alternative solution I realize that this is actually completely kosher with all of the regulations there's just broken incentives in the Health Care system that were kind of keeping the better treatment out of people's hands and I've dedicated My Life along with my co-founder to making sure that the best solution for allergies gets to the people regardless of how our Health Care system is built did you know that most Founders waste days of their lives chasing the wrong investors well as a Founder you know your time is your most valuable resource don't waste it on the investors that aren't going to write you a check here at Thunder we built a free tool that identifies exactly which VCS are worth your time to pursue we score your company against 3500 VCS and family offices that have been vetted and are actively writing checks into companies like yours get your AI recommended list of investors that will look like this absolutely free by creating a free profile at thunder. 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VC now let's get back to the show well it's a it's a close to home problem for me because my whole life growing up in Southern California didn't have any allergies totally fine it's basically desert down there anyways and when I moved to to New York I was like whoa what is this I can't breathe I wake up I like sleeping with the window open and then I'd wake up like completely congested and miserable um you know started doing the sprays and you clar it in all that kind of stuff and it was it was pretty tough my body managed a little bit better over the years but uh you know now that I I just moved to London and I'm here in London It's like got a little bit of it but not too bad but uh it runs pretty rampid in my family my mother's you know completely bombarded with allergies and uh you know so it's I'm very keen to kind of learn more and you know definitely my mom might be a customer after this because she's the one doing the shots you know every year multiple times a year kind of stuff so um you it's a it's definitely a very big problem and a very painful problem so yeah usually when that's the situation usually PCS or investors get excited hence why you're on the show um but before we dive into your your fundraising experience you uh you have more of a product you more software product and Engineering background uh how did it you know how did you get from that to starting a uh personalized Healthcare business yeah absolutely I mean the very clear answer is like I had the problem myself and then I found a way to fix the problem myself and then I was just like well how do we do this for more people and when I say more people the first person I tried to get on this treatment after myself was my wife and then my sister-in-law right uh and it was only after I had uh proven the product efficacy with three people that I actually started looking for a market my personal background yeah it's in software and in growth product so what that really means is like how can you use engineering skills and talent to uh grow a business right um and so that was a nice intersection of being an engineer and being a marketer uh after that it was finding something that I felt was worth trying to fix on a grand scale and when one in three people have allergies that are so bad that they're taking pills multiple times a year and it's just like they just can't breathe day in and day out and it's a huge loss of quality of life you know that does feel like a big enough problem to sink my teeth into um after it's funny in our business you would think that the person with the computer science background or the software engineering background would be the technical founder you know my co-founder is a doctor so technically he's he's the one that's really handling the technical stuff um you know nowadays it's relatively it's a lot easier in 2024 than it was 15 20 years ago to stand up a website um and you know sell something to an end user uh medicine hasn't gotten any easier though so um you know I think when someone wants to become a Founder it's about finding the right problem and a lot of times you want that problem to be ginormous because the risk you're taking is really big and then you need to have a fit with the founder skill set right um and so my experience at other consumer companies um made it a good fit to solve a consumer problem now that's not saying that I couldn't have gone and you know started selling to the government but it's just a little it would be a little harder and it's like you know lean into your strengths I like to say no that's fair and uh you you've had a prev previous founder experience correct yeah during uh during college I did what every student does and I was like I hate studying so I should create something that makes studying easier instead of just studying uh that's also where I learned my very very first uh lesson which is your customers and Prospects are going to lie to you for example every student is like I want to study more uh in fact when I really dug into what students want to do it was like I just want better grades uh learning was secondary towards uh towards better grades um and then I did the third thing which is like well I was like What if I just got you test Banks and made it easy for you to review test spanks and that actually did work as a product because you know that was a whole life cycle of I a hypothesis I proved the hypothesis wrong I adjusted my understanding of the market and then I found a better solution for the market but um unfortunately when I graduated my ability to get my hands on test Banks just plummeted as you can expect um and so I wrapped up that uh that project but we did raise a very small amount okay so you gota you got kind of got your appetite wet you know you got your your little bit of experience there and then ultimately to to Wiley where you're right now and so let's talk about fundraising so you raised obviously maybe a little bit of you know maybe friends and family back in fluency but with Wiley sounds like he raised a couple million um just talk about kind of the the strategy to raise the timeline and and what that experience was like yeah absolutely absolutely so the way we approached windley initially was very much let's just we knew there was like a product which worked right cuz um I ended up just starting a company with the doctor who had been able to help me and specifically what we do at windley is we're like an allergy practice to fix your allergies forever only we do it online instead of in person and we make it more simple and more easy than any other doctor's experience you've ever been through right so we have a atome allergy test we'll figure out what you're allergic to and then we're going to ship you all of your medicine and then when whenever you want to talk to a doctor you can text email or call us and we're super accessible you don't even get kind of like a phone tree which we're all used to hearing whenever we call support right um and you know we're going to respond right to you so it's a highly accessible doctor with a very narrow focus on what we treat which is allergies that you breathe in so the doctor which had helped me he already knew kind of how to handle uh kind of doing this sort of treatment in a non-traditional way because I was in New York and he was in Denver Colorado so well once he fixed my problem once he fixed my wife's problem I was like well how do we prove out that more people want this and so we started just testing yes we know that there's a lot of people with allergies but there are there people with allergies who want to fix them online once we got about 20 people um signed up that's when we really knew okay there seems to be some interest here how do we fund it so that we can kind of grow it initially we were just just going to self-fund it and we were just going to recycle our profits from our full-time day jobs into this to see what we could do but as a whim we applied to Y combinator now I'll be completely honest the reason I applied to Y combinator is because it's a very good litmus test for how serious your co-founder is right A lot of times you start companies and you're getting lucky and you know it can be very difficult to start like the number one reason companies die is because co-founders break up and both people kind of lose the passion and ability to keep fighting through right nothing's going to kill a company more than that um and and money money is also one of the other right but the but the reason you run out of money is because you stop trying right like like well every company that I've seen give let me rephrase especially at the early stage obviously once you're a massive company and you're like a trying to become a going interest it's different but if you've raised $500,000 between two people uh the number one reason you're going to die is because someone starts feeling someone loses belief on like we together as a team deserve to be billionaires straight up right um and so that's the relationship right that's a I would you know my co-founder is my cousin but I probably talk to him more than I talked to my wife um which you know that's a topic for a different podcast very very famar anyway um so yeah I Ed the Y combinator application we'd gotten some traction I was trying to see how serious are both of us both him and I right uh and what we realized is like look we're serious about this we both believed in this just going through the application helped us realize that like um we were excited about the opportunity um and then we were very lucky to be invited for an interview and then uh we studied very hard and we actually got into ycombinator so our very first round of fundraising was us thinking that we were going to kind of be self-funded through our day jobs as a side business to getting into y combinator um and so you see these sort of accelerator programs as like a relatively simple application and they're going to drop a stack of capital on you I think YC combinator gives $500,000 now so that's enough money to prove out almost every business idea yeah and that's something I want to talk about kind of the the YC experience and your decision to do it I think that's a pretty unique and valid reason to to do it uh to kind of get that early validation and the fact that you got that experience is you know super valuable and it also Imagine opens doors so you know kind of now that you've kind of been through it and you raised a little bit of money through it kind of what was the experience you know since then and uh how has that kind of impacted you guys yeah I mean I think y commentator was incredible right we did basically a few hours worth of work and they gave us our preed round it's the easiest money we've ever gotten um I feel very grateful for them taking a chance on us then going through whyc one of the decision makers have a stuffy nose during the presentation do they were they feeling you I think one thing that's really interesting is all of our initial angels and even a lot of our um institutional dollars the partners are the investor like the person whose money is being invested you know they started out as patients and customers and then once we fix them they're like oh yeah this makes a lot of sense like this should exist in the world it's going to exist and these people are hungry enough to make it happen um so yeah many of our investors did have stuffy noses um so you ra you say it as a joke but it's totally true yes it's exactly yeah man it's very strategic um no so I would say why combinator I think from the outside before going into YC I thought oh this is going to be like a college program it's going to be a step-by-step course and at the end of it I get to present right because that's kind of what my experience had been in college and um even after college basically any programs that i' done that's not what ycon Mater is ycon Mater basically for us on the very first day they sat us down and they're like look we're going to give you money we're going to give you connections we're going to give you all of our written doc like all of our written down learnings um and we're going to give you access to like hundreds if not thousands of brilliant people who will actually sit down and take your call for the next few weeks it's up to you to take advantage of that uh and you know you saw very quickly people who weren't able to manage without the structure right and then you also saw because the only limiting factor is how how much energy and how much uh momentum are you putting in that you could like individuals can kind of Skyrocket very quickly for us personally y combinator allowed us to go from a single state practice to a 50 state practice in approximately 3 weeks because they just opened the doors and got us in like you know doctors who had the right licenses would take emails from us once they saw that we were YC combinator backed and we were serious versus like beforehand you know they just wouldn't open it's not their fault they're protecting their time it's you know they fund like YC just fun me changed who we are and they were able to broker those introductions um so I would say yeah why combinator fundamentally changed the trajectory of this business and thus My Life um and then when I say they give you that stage it's totally true like you're not going to get as much well I think when it comes to fundraising you're effectively running an auction process right uh because usually when you're fundraising there's a certain amount of the company you want to sell you want to sell it in a certain amount of time and you want to get the best Val the get best uh maybe not the best valuation but the best terms for it and the way to build Leverage is by running a parallel process as much as possible and demo day acts as a way to say it acts as like a um decision point for people who you're talking to before demo day and say hey look you want to get in before demo day because once demo day happens just market dynamics are going to change how much we're worth and then demo day just puts you in front of like 300 400 people and if you're able to make a good pitch you will get a lot of introductions and you'll be able to take a lot of calls um the when we went out to raise again just emulating the kind of pressure which is created by demo day is effectively impossible uh so um you know I'm just always chasing chasing that as far as like next time you fund raise what are you going to try and do yeah yeah I want to create like I want to create a market for the company that I'm trying to sell it's basically it no it's there some good insights I feel like a lot of Founders aspire to be NYC or you know think of it as an option for them and it's good to kind of get that that inside scoop in perspective and yeah it is kind of a you get that one shot to kind of put out your best best presentation you got the most attention the most eyes on you and try to capitalize on the best you can um plus so you graduate you you kind of move Beyond YC what was it like and after where you at with uh the business and you you went on to raise some more Capital um I think in 2023 so you know year or two years later after YC uh how was that different and you know just kind of walk us through that yeah I so we went through yomer in 2021 where a Healthcare Company during the greatest healthc care crisis um that hopefully all of us were will ever live through knock on wood um and uh there was a lot of interest right like oh you're a healthcare you're doing something very specific you're in respiratory and there's a respiratory virus going around maybe you're going to be able to expand into something that every single person in the world will need um and you can sell a vision like that uh interest rates were low um a lot of money was going in Venture because their LPS had money to throw around uh because the LPS like weren't investing in consumer goods for a there was like a lot of macro effects um that were changing the fundraising environment then 2023 comes around and 2023 is very different interest rates are suddenly high again um I don't want to say it's a correction but like the world has opened up so money is going different places that's actually what happened and um you know we're we leverage AI because if you're not using AI nowadays you're just shooting yourself in the foot um but we're not a AI company at the end of the day we're a Healthcare company that's going to make people feel better and give them the ability to breathe better and like fix a fundamental problem they have right we're not a chat GPT um and the interest just isn't there as much right VCS are looking for something different and we're just out of cycle now it's very natural and this is very normal but what this also means is uh maybe it's just harder to raise if you're in healthcare versus if you're in like AI business over the next five 10 years um you know we we all forget the heady days of 2019 when crypto and people actually talked about crypto right uh is probably a lot easier to raise for a crypto company in 2019 than it is today you know um so I would say the biggest difference is just understanding that like while everyone probably took was taking my calls in 2021 and 2023 it was more like industry focused and people that actually had an interest in healthcare but that also kind of helped me you know I was more mature and I also knew that like okay this is actually good because I think you know fundraising is about finding you know you only need one yes right what's hard is to get to that one yes you're going to go through like 300 NOS but personally I think you want to get to those NOS faster so that you're not kind of uh leaving it up in the air so like you know I would say one of the early mistakes I made is like I was talking to like B2B infrastructure SAS companies and like that was just waste of everyone's time because they don't want to invest in consumer healthare and I didn't know they didn't want to waste in consu uh waste time in consumer healthare what they would consider wasting time and uh you know I would like be sad when it didn't work out when like it's not personal it's just like what are they supposed to do what are they allowed to do um yeah so I would say that's kind of uh the difference between 2021 and 2023 and also like uh what are just some learning I have from 2021 and 2023 so with the 2023 raise maybe the numbers uh were not exactly what you said but just had of curiosity how did you set up so many meetings how did you get people to open up their door and have a chat with you did you have 300 meetings you send 300 emails kind of what was that that experience like to to where you ultimately got the check that you were looking for yeah so uh you know we announced our raise I think early 2023 and when I say announced it like that's when it went public with it so the actual process had been happening in late 2022 and that was simply a function of I believe that uh people want to hear about you right so every time I talk to someone I'm very open with my investor updates I'm like hey I mean you're probably going to get them Jason like the next one I send out is going to have Jason uh it's going to have your email it'll come right to you and you know it'll be like oh I talked to this guy hopefully you have positive um you know takeaway from me and now you're like okay this is what he's up to um and you know when the time comes and I announce like Hey we're actively fundraising we have this term sheet and we want to close out three5 million whatever you'll be able to say you know what aish is pretty cool I've been following him along for a reason uh this might be interesting to like this family office right so that's kind of how it works out that's how you that's how I leveraged the big interest from demo day again uh two years later right because fundamentally you have to like it it doesn't feel like it when you start it feels like a short game when you start it feels like you know every two years you're starting from scratch but what's actually happening it's a compounding game the relationships I made in 2021 uh they are still part of my life they're still paying off figuratively um and you never know when someone might be able to help you uh especially in something as broad as allergies and healthcare because everyone has everyone knows someone with bad allergies and we've all had to deal with the health care System um I actually think you know sometimes people will say well yeah but how does that work if you're doing like a niche AI thing and I was just like I just think like you never know how it's going to work out because like the people who are just sitting on their hands and you know aren't going to be helpful it doesn't cost anything to stay in touch with them and the people who are going to be helpful will become helpful to you because you're just you know keeping them interested and you're telling a good story and everyone wants to learn from the founder who's in the trenches because Founders who are in the trenches always have interesting things to say um yeah that's something I always kind of advise Founders to to speak to is just like it's one thing to go out and say I'm building X give me money but I think what most investors like is they like to be educated on and Industries and sectors and markets and opportunities and strategies and be told stories that you know they probably haven't heard before or because you're a Founder that's in the thick of it every day you just have a different perspective to share and spending some time on that those conversations to kind of finding out where investors lean as far as you know wanting to kind of unpack something a little bit more make sure to try to feed that and kind of give those perspectives and opinions uh because it just creates one more of a relationship in a dialogue as opposed to shut up and give me your money uh which usually doesn't end well um you know everyone it's a little trickier who would have thought yeah you think like you have money I want money why don't you give me money I don't see what's so complicated yeah I go have calls all the time with Founders and they're just like okay so when do we get the money and I'm just like I think you're already on the wrong foot and you probably won't get it um and you know it's it's a much harder process when they when you have that conversation so yeah I think that's some good insight and kind of how you kind of set it up and and ran your process and whatnot and just kind of now going there two different you know when is hot and when is not so hot um kind what was some of the I would say more frustrating experiences that you know looking back you would have done differently yeah I mean I think I just take it's it's hard when you're a Founder to like put yourself out there and like bear your heart and then someone has to say no right and and I think even from the VC side it's like they're not saying no because they don't believe in you or they don't think that you're not going to make maybe they don't think you're going to make it but effectively like you know hearing hearing 300 NOS doesn't feel good even if you're inor to it right like it just inherently doesn't feel good um and I think personally uh I kind of let that affect my momentum and so that extends the time of the fundraise which extends how long I am from the away I am from the company so the thing that I the like most frustrating thing is like the lesson I have is like kind of try and keep it tight and focused and say like hey I'm going to be away from the company for three months we're going to see what we can do and then we'll reconvene in three months and see like okay is do we want to commit another three months to it or we just going to shut it down and like find a different way to grow this company um because like Venture Capital at the end of the day is just like an option um or it should just be an option for some companies it's like a Lifeline so you know it can be it can be really difficult to like emot like personally it feels bad to fundraise because you hear no that is what I hear from the vast majority of Founders now there are some like incredible Founders who love fundraising who love kind of telling their story and are just good at it um but for me personally it just feels like okay hey I'm talking to you I told you everything I think it's a awesome awesome case and then like you get an email the next day being like yeah we're GNA pass for XY and the reason you're like you don't even know what we're going to be able to do um and I think that just feels hard uh and then you have to take that back to your team and your team's like well since you've been gone you know we're down you know 10% of the team so we're not you know we're growing 10% less for example like and then you're like oh no this is going to affect our story so it feels like a death Loop and you have to keep yourself out of that kind of mental state and just realize like no this is just a bet you're taking and regardless of the outcome you entered into it on good faith I think that is actually incredible advice for Founders to to be able to take in and acknowledge in their process and but I want to I want to kind of take a step back and talk about the venture capital is or should only be considered ad option not a Lifeline that kind of prompts the question of just yeah how do you think about your company's Capital strategy and for the audience I'll just elaborate on what capital strategy means because that's what we do here at Thunder all day every day is up in companies navigate it so Capital strategy is basically how do you prioritize the your resour ources in most cases resources capital and what's kind of the plan to acquire the capital resources that you need and or plan for a capital than like an acquisition um you know so just to kind of get some context to the audience there so AOS kind of what you what was your thought process how do you think about Capital strategy for your business yeah I mean coming out of YC combinator the way you Acquired Capital was you fundraised and the reason for that is really simple you are a complet complely fresh company you have no customers you have no Revenue how why would people give you debt so where you going to get money from you're going to sell a part of your company on the dream that you know someone will want to buy it because it's going to be worth billions of dollars if you've done the right thing and actually built a company in the intervening two or three years or however much time it's been uh then you should have revenue and once you have Revenue you can start looking at Capital like ways to get Capital that like every other business does that's not a startup you can get uh you can do debt financing which is just getting a loan nowadays there's also Revenue based financing and factoring which is like oh you should get paid you're going to get paid this much over the next 12 months so we'll give you the money upfront um you can increase you can find Capital from your existing customer base by raising your costs like raising your prices um you can find Capital by uh offering a 12-month plan paid upfront instead of paid monthly so now suddenly your cash collection like you have the cash to do whatever you need to do and as long as you cover your costs and know you're going to be around in 12 months well suddenly you're not as worried um so like those are all and the way I discovered these things is I stopped talking to like seed stage SE uh seed stage um like software Founders and I asked my whole network I asked people who I like I asked doctors who had private practices of four locations and I say like well how did you get the capital to open up your fifth location or your sixth location um you talk to a restaurant tour dude restaurant margins are crazy so how does a restaurant tour open up two three four new locations you talk to them you figure out how they approach it you they tell you hey it's about it's actually not about your p&l it's about your balance sheet because your balance sheet is actually your p&l only matters if you're trying to get sold or get invested your balance sheet is what's keeping you alive um and the most interesting thing is very recently uh consumer package Goods so like the sort of stuff that's sold online through Amazon or Instagram or Shopify you know they used to have a very steady business model of you would run a Facebook ad or a Tik Tok ad and it would be very well targeted and they were very confident that it would result in a sale now there have been a lot of changes recently around that sort of tracking which is good for the consumer and but has thrown a huge wrench a huge wrench in these people's abilities to kind of Target and predict um how many sales are going to happen and I talk to people who are doing you know uh 10 20 million per year in revenue and they're like yeah I uh you know and they have much bigger costs than most software companies because they have inventory right so they have to do upfront expenditures and they have to like cross their fingers and pray and also uh if their inventory sits in a warehouse so if they incorrectly project that costs them dollars every single day because warehouses uh is you know you have to pay for warehouse space so um all of this is like I real I basically what I did this is a long story Jason to say like I found companies I found businesses which are harder to run than um like my medical practice or uh than a SAS company and I asked them how they did it and they were like uh we're just very smart about we track the money coming in differently than we track the money going out and you should find a way to like front your Revenue so that you collect C like uh so you get Capital sooner and so I'm gonna be completely honest the best way we increased our Runway is we introduced an annual plan and suddenly people are paying us for 12 months of uh uh 12 months of service upfront and that was huge for us that like fundamentally changed the tra trajectory of the company because now we have cash that we can actually play with and operate with and that that's called ra from your customers and exactly and that's the best place to raise too it's so so many Founders just don't even Pro because they're just so addicted to venture capital and that narrative and that once you're in the founder ecosystem and you've been exposed to venture capital it becomes like this point of validation and credibility and everyone wants it but in reality looks good it's also it feels like it feels like a silver bullet you know it's like I just need one person to say yes and drop like five to1 million doar on me and then all of my worries are gone right uh or you know you can like buckle down and do the hard ugly work of like uh making your company just better from like a p&l and balance sheet perspective and suddenly uh you're actually still you're actually now more attractive to going out and fundraise too right and have better options you you don't have to just pay for you know GI Venture you could do you could sell the private Equity you could do debt you can do all kinds of financing options and exactly one of the other thing I'm just so glad you mentioned the the annual plans because again financing through your customers is very much a possibility especially if you have larger ticket items and um or subscriptions or things of that sort to just pull that cash up front and then just manage it appropriately you don't want to like blow it off you know the then you got to go out customers pay for it it's definitely the point is that you have to think about Capital strategy and what options are on the table specifically to you and your environment and your industry and your scope and you know you've kind of dabbled in the kind of talking about SAS like but you're kind of a personalized healthc care cpg type you know model and uh you know it's it's not SAS but it's got recurring you know aspects we're Healthcare as a service right because uh you have to be on our treatment for a couple of months up to three years if you want the lifetime of relief uh and so there is subscription Revenue there but we don't have software margins and like in software you can suddenly stop building like you can stop spending on software basically uh and like the software won't change for a few months and you'll still be able to collect that Revenue uh whereas like for us we have doctors who review patients charts like that is an ongoing cost that absolutely needs to happen the medicine we send out that is a cost that absolutely has to be covered so we're a we're an in between but like you know eventually like once you're big enough like all of this is a function of being big enough to like take advantage of these strategies if you have no customers you can't for you can't like do uh release an annual plan and raise from your customers if you have no uh costs you can't uh open up a better credit card and get like six uh two Monon terms and like write 60-day payout on the credit card you can't negotiate with your vendor if you're only spending like $300 a month with your vendors they're not going to negotiate with you on payout but when I'm spending you know $80,000 a month with someone and I say hey I'm GNA pay you on net 90 instead of net 14 um it's a lot harder for them to say uh no thank you right and all of this all of this to get to that um I believe it's called negative cash flow cycle or is it a positive cash conversion uh negative Cas negative cash conversion yeah man like that's the dream negative cash conversion where money hits your bank account and stays with you before you uh longer like um than it costs before you to pay out so the don't know cash conversion cycle very important for any kind of like inventory related business but for the sake that when you actually have to lay out cash for the uh and then when do you get paid back so typical consumer business is like 30-day to 90day or even worse you know 90day plus cash and Cycles you buy a bunch of inventory and you sit on it until you sell it out and that might average out to like 90 days um until what you got to buy again and so on so that's you know manageable for some businesses but if you have a NE negative cash conversion cycle that means you've already been paid before you have to pay for that product uh for the goods and that's that's how healthy businesses continue to grow and scale and you know credit card float is one of the strategies to do that again Capital strategy I know it's so good and yes I like this idea comes from like inventory but you can apply it to like acquisition spend in general right like if I have a salesperson and we pay out our bonuses at the end of the quarter right and so if like the salesperson closes people throughout the quarter I get all that Capital up FR and now however much time is between when the the revenue hit the bank account and I paid out the salesperson's bonus that's a cash conversion cycle right there that's like beneficial to us um and again this is why like this is on the flip side right if I get if I pay out the bonus on the full annual contract value but they're paying monthly then I'm actually uh sending money out before I got the money in which is not what you want to do sorry uh I feel like I was well spoken at the beginning of this and like now I'm getting giddy talking about cash conversion Cycles Jason it's it's actually something that a lot of Founders don't even think about they don't like it's just not a tool in their toolbox that they consider or have been educated on but because you as you mentioned earlier you reached out to other Founders and other entrepreneurs that are building businesses and how do they do it how do they manage it and you're talking to people that already been through it it uh opens up doors it opens up ideas allows your brain to think and you know you start kind of looking past what you thought was a brick wall but it's really just a you know glass wall that you can just kind of break through and you know move through and kind of see what your options really are so that's a that's why I love talking Capital strategy it's a lot of fun you know just all these kind of creative intive ways I see companies that you know a VC would look at them and like oh they're gonna be dead tomorrow uh you know looking at traditional metrics uh but when you look at one how committed Founders are sometimes to deriving the desired outcome uh they find way and in the last few years a lot of Founders that thought VC was their way and realized VC ain't their way especially cpg they had to play this game and had to kind of find alternative strategies because yeah that $5 million check that you think will solve all your problems is never going to come um and so you have to get creative or you give up uh so you I think this is this has been a fun chat um so before uh before we wrap up uh any kind of parting advice to to Founders like a oneliner that you want to share for Founders that might be considering options for themselves uh there's nothing more important than having a group of friends who are going through it with you so find your find your people uh it might feel awkward it might take time but the value in having people to learn with but also shoulders to cry on and like someone to just call when you know calls that you thought went really well actually didn't go well calls that you like you want to have someone to celebrate with but you also want to have someone to um you know uh commiserate with and uh those human connections are what's going to give you the energy to take those 300 Nos and just stay heads down and keep pushing through uh I would say like if you can Avo fun avoid fundraising you should do that too every business is different and it's you know contingent on what their Des desired outcomes are ultimately as some you know fundraising might be the only option to pursue their Ultimate Dream but uh I think the surrounding yourself by you know other Founders and that's something that impacted my career early on was coming out of college with all like-minded founders that were all that majority of that group like 8 89% of all of us was about 20 of us have all gone on to build1 million doll companies you know plus um and we were all in it in the early days supporting each other you know one after another and just being that you say shoulder to cry on the person that can kind of you know empathize with you and understand versus your buddy that works at you know Google who you know gets their lunch paid for and they're having a steak you know steak uh Med for for lunch at their office uh while you're eating Ramen to you know kind of save save expenses so um this has been a fun chat uh akos where where can people learn more about you and windley yeah I mean windley it's easy to find it's wiley.com w y n DL y we're all over YouTube Tik Tok Instagram uh if you search anything about allergies we're probably going to pop up um for me personally look I'm always happy to chat send me a email at Akash windley dcom or connect with me on LinkedIn um hopefully my SEO is good enough that you're going to be able to find me but if not uh just something for me to work on awesome well people can't find you they'll let you know well I guess they can't let you know because they can't find you but we'll make sure to make the links easy and accessible in the YouTube description uh down below so uh Goos I really appreciate you sharing your Insight sharing your story and thanks for joining us on the Pod today and thanks for having me thanks for listening to the show today we hope you learned something valuable and if you did be sure to let us know in the comments or by hitting that like button and if you're a Founder looking to raise Capital then join us at thunder. VC we provide a free tool to help you identify which VC family offices or ERS are the best fit for you using raai it will save you a ton of time from chasing the wrong investors and since launching our free tools Founders that have joined our Network have gone on to raise over1 billion dollar in financing again you can find these free tools at thunder. VC and as a reminder we release new episodes every week so stay informed by subscribing to our newsletter at join. thunder. BC again that's join. thunder. BC and if you or someone you know has recently raised around and want to share your story please email me at Jason thunder. VC and that's our show we hope you enjoyed it and we see you next week